[Federal Register Volume 76, Number 247 (Friday, December 23, 2011)]
[Notices]
[Pages 80410-80411]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32962]
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PENSION BENEFIT GUARANTY CORPORATION
Pendency of Request for Approval of Special Withdrawal Liability
Rules; the Cultural Institutions Pension Plan
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Notice of pendency of request.
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SUMMARY: This notice advises interested persons that the Pension
Benefit Guaranty Corporation (``PBGC'') has received a request from The
Cultural Institutions Pension Plan for approval of a plan amendment
providing for special withdrawal liability rules. Under Sec. 4203(f)
of the Employee Retirement Income Security Act of 1974 and PBGC's
regulation on Extension of Special Withdrawal Liability Rules, a
multiemployer pension plan may, with PBGC approval, be amended to
provide for special withdrawal liability rules similar to those that
apply to the construction and entertainment industries. Such approval
is granted only if PBGC determines that the rules apply to an industry
with characteristics that make use of the special rules appropriate and
that the rules will not pose a significant risk to PBGC. Before
granting an approval, PBGC's regulations require PBGC to give
interested persons an opportunity to comment on the request. The
purpose of this notice is to advise interested persons of the request
and to solicit their views on it.
DATES: Comments must be submitted on or before February 6, 2012.
ADDRESSES: Comments may be submitted by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the Web site instructions for submitting comments.
Email: reg.comments@pbgc.gov.
Fax: (202) 326-4224.
Mail or Hand Delivery: Legislative and Regulatory
Department, Pension Benefit Guaranty Corporation, 1200 K Street NW.,
Washington, DC 20005-4026. Comments received, including personal
information provided, will be posted to http://www.pbgc.gov. Copies of
comments may also be obtained by writing to Disclosure Division, Office
of General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street
NW., Washington, DC 20005-4026, or calling (202) 326-4040 during normal
business hours. (TTY and TDD users may call the Federal relay service
toll-free at 1 (800) 877-8339 and ask to be connected to (202) 326-
4040.)
FOR FURTHER INFORMATION CONTACT: Theresa Anderson, Attorney, Office of
the Chief Counsel, Suite 340, 1200 K Street NW., Washington, DC 20005-
4026, (202) 326-4020. (For TTY/TTD users, call the Federal relay
service toll free at 1 (800) 877-8339 and ask to be connected to (202)
326-4020.)
SUPPLEMENTARY INFORMATION:
[[Page 80411]]
Background
Section 4203(a) of the Employee Retirement Income Security Act of
1974, as amended by the Multiemployer Pension Plan Amendments Act of
1980 (``ERISA''), provides that a complete withdrawal from a
multiemployer plan generally occurs when an employer permanently ceases
to have an obligation to contribute under the plan or permanently
ceases all covered operations under the plan. Under Sec. 4205 of
ERISA, a partial withdrawal generally occurs when an employer: (1)
Reduces its contribution base units by seventy percent in each of three
consecutive years; or (2) permanently ceases to have an obligation
under one or more but fewer than all collective bargaining agreements
under which the employer has been obligated to contribute under the
plan, while continuing to perform work in the jurisdiction of the
collective bargaining agreement of the type for which contributions
were previously required or transfers such work to another location or
to an entity or entities owned or controlled by the employer; or (3)
permanently ceases to have an obligation to contribute under the plan
for work performed at one or more but fewer than all of its facilities,
while continuing to perform work at the facility of the type for which
the obligation to contribute ceased.
Although the general rules on complete and partial withdrawal
identify events that normally result in a diminution of the plan's
contribution base, Congress recognized that, in certain industries and
under certain circumstances, a complete or partial cessation of the
obligation to contribute normally does not weaken the plan's
contribution base. For that reason, Congress established special
withdrawal rules for the construction and entertainment industries.
For construction industry plans and employers, Sec. 4203(b)(2) of
ERISA provides that a complete withdrawal occurs only if an employer
ceases to have an obligation to contribute under a plan and the
employer either continues to perform previously covered work in the
jurisdiction of the collective bargaining agreement, or resumes such
work within five years without renewing the obligation to contribute at
the time of resumption. Section 4203(c)(1) of ERISA applies the same
special definition of complete withdrawal to the entertainment
industry, except that the pertinent jurisdiction is the jurisdiction of
the plan rather than the jurisdiction of the collective bargaining
agreement. In contrast, the general definition of complete withdrawal
in Sec. 4203(a) of ERISA defines a withdrawal to include permanent
cessation of the obligation to contribute regardless of the continued
activities of the withdrawn employer.
Congress also established special partial withdrawal liability
rules for the construction and entertainment industries. Under Sec.
4208(d)(1) of ERISA, ``[a]n employer to whom Sec. 420[3](b) (relating
to the building and construction industry) applies is liable for a
partial withdrawal only if the employer's obligation to contribute
under the plan is continued for no more than an insubstantial portion
of its work in the craft and area jurisdiction of the collective
bargaining agreement of the type for which contributions are
required.'' Under Sec. 4208(d)(2) of ERISA, ``[a]n employer to whom
Sec. 420[3](c) (relating to the entertainment industry) applies shall
have no liability for a partial withdrawal except under the conditions
and to the extent prescribed by the [PBGC] by regulation.''
Section 4203(f)(1) of ERISA provides that PBGC may prescribe
regulations under which plans in other industries may be amended to
provide for special withdrawal liability rules similar to the rules
prescribed in Sec. 4203(b) and (c) of ERISA. Section 4203(f)(2) of
ERISA provides that such regulations shall permit the use of special
withdrawal liability rules only in industries (or portions thereof) in
which PBGC determines that the characteristics that would make use of
such rules appropriate are clearly shown, and that the use of such
rules will not pose a significant risk to the insurance system under
Title IV of ERISA. Section 4208(e)(3) of ERISA provides that PBGC shall
prescribe by regulation a procedure by which plans may be amended to
adopt special partial withdrawal liability rules upon a finding by PBGC
that the adoption of such rules is consistent with the purposes of
Title IV of ERISA.
PBGC's regulations on Extension of Special Withdrawal Liability
Rules (29 CFR part 4203) prescribes procedures for a multiemployer plan
to ask PBGC to approve a plan amendment that establishes special
complete or partial withdrawal liability rules. The regulation may be
accessed on PBGC's Web site (http://www.pbgc.gov).
Section 4203.5(b) of the regulation requires PBGC to publish a
notice of the pendency of a request for approval of special withdrawal
liability rules in the Federal Register, and to provide interested
parties with an opportunity to comment on the request.
The Request
PBGC received a request, dated January 11, 2011, from The Cultural
Institutions Pension Plan (``Cultural Plan''), which the Cultural Plan
subsequently amended, for approval of a plan amendment providing for
special withdrawal liability rules. PBGC's summary of the actuarial
reports provided by the Cultural Plan may be accessed on PBGC's Web
site (http://www.pbgc.gov). A copy of the complete filing may be
requested from the PBGC Disclosure Officer. The fax number is (202)
326-4042. It may also be obtained by writing the Disclosure Officer,
PBGC, 1200 K Street NW., Suite 11101, Washington, DC 20005.
In brief, the Cultural Plan is a multiemployer plan covering
cultural institutions, such as zoos and museums, and New York City-
funded daycare programs. The Cultural Plan's submission represents that
the industry for which the rule is requested has characteristics
similar to those of the construction industry. The Cultural Plan
submitted an amendment prescribing special withdrawal liability rules,
which, if approved by PBGC, would be retroactively effective as of July
1, 2009, to the extent permitted by ERISA Sec. 4214(a). Under the
proposed amendment, complete withdrawal of an employer would occur
only: (a) Under conditions similar to those described in ERISA Sec.
4203(b)(2) for the building and construction rule; (b) upon the
employer's sale or transfer of a substantial portion of its business or
assets to another entity who performs such work in the jurisdiction of
the collective bargaining agreement but has no obligation to contribute
to the Cultural Plan; or (c) when the employer ceases to have an
obligation to contribute in connection with the withdrawal of every or
substantially all employer(s) from the Cultural Plan. Partial
withdrawal of an employer would occur only under conditions similar to
those described in ERISA Sec. 4208(d)(1). The proposed amendment would
not apply to any employer who made contributions for non-collectively-
bargained employees in the year of withdrawal and the four preceding
plan years. The request includes actuarial data to support the plan's
contention that the amendment will not pose a significant risk to the
insurance system under Title IV of ERISA.
Issued at Washington, DC, December 15th, 2011.
Joshua Gotbaum,
Director.
[FR Doc. 2011-32962 Filed 12-22-11; 8:45 am]
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